Return of Banking Bonuses unacceptable
2 March 2021
Spokesperson on Finance, Public Expenditure and Reform
- Clarity needed if special tax rate of 89% will apply to future pay-outs?
- Minister for Finance acting on behalf of bankers not the people.
- Return to the speculative economy of the Celtic Tiger must be opposed.
The decision by the government today to allow AIB to pay bonuses to staff at Goodbody, clearing the way for the bank to buy the stockbroker is unacceptable said Labour Finance spokesperson Ged Nash who will quiz the Minister for Finance tomorrow in the Dáil on the issue, adding it was the first step towards the full return of bonuses and asking if the special tax rate of 80% will apply to future payments.
Deputy Nash said:
“The decision by the Fine Gael-Fianna Fáil government to allow some staff in AIB to be paid bonuses is unacceptable and sends completely the wrong message to the public who are struggling with the economic impact of Covid-19. This is obviously the first step towards completely lifting these rules. It comes on the same day another stockbroker firm has been fined a record €4.1m, and a day after Bank of Ireland announced a cull of 88 branches across the country that will seriously damage communities.
“In 2010 after a state bailout, AIB was forced to sell Goodbody stockbrokers, and it was bought by FEXCO for €24 million. The decision by the government today clears the way for the majority state-owned bank, now led by the former chief economist at Goodbody to buy back it’s former subsidiary for €138m.
“Toxic risk taking influenced by the likelihood of large bonuses was at the root of the last financial crisis. This decision today is the first step towards reversing one of the lasting policy measures that was put in place to protect the public from future speculative bubbles. The record fine for Davy Stockbrokers of €4.1m clearly shows that few lessons have been learned from the last financial crash.
“We urgently also need clarification from the Minister if the special tax rate of 89% will apply to any future bonuses that he signed off on today. Will stockbrokers at AIB be subject to the special tax rate? We need an answer to that question.
“The Minister for Finance needs to be fully transparent here and outline tomorrow what his reasons for waiving this rule are. Last week I called for a Q&A session in the Dáil on Ulster Bank, and that has been granted, but we now have major issues at AIB and Bank of Ireland too.
“We can’t go back to the speculative culture that helped sow the seeds of the great economic crash.”